"Do you have any view on Malaysia? It has displayed strong resilience and held up pretty well even amidst correction in most equity markets."

Eoin Treacy's view Thank you for this question which I'm sure will be of interest to other subscribers. A number of country indices, predominately in the ASEAN region, have been relative strength leaders since late 2008. They bottomed early, broke out of their bases early and exhibited relative strength on successive occasions over the last two and half years. They have been among the first to find support and reassert their medium-term uptrends following reactions. Markets such as Malaysia, Indonesia, Philippines, Korea and Thailand are some of only a small number of countries to sustain moves above their pre-financial crisis peaks.

The Malaysian market has been ranging mostly above 1500 since January in a gradual process of mean reversion. Indonesia has performed somewhat better but has also paused over the last six months. You are correct to point out how steady these indices have been against a background of weakness on global stock markets. However, they are unlikely to be able to sustain moves to new highs while most other markets are in a corrective phase. If Wall Street experiences a more prolonged correction, then these indices may also experience deeper pullbacks. However, they are also more likely to be among the leaders once the corrective phase has run its course.